October inflation seen remaining muted

Higher pork prices as well as faster increases in energy and transport costs likely raised inflation in October, according to the majority of economists polled by the Inquirer last week.

Seven of the 14 economists projected the rate of increase in prices of basic commodities last month to be higher than the four-month low of 2.3 percent posted in September.

The Philippine Statistics Authority will release its October inflation report on Thursday.

Two economists—Ateneo de Manila University’s Alvin Ang and Bank of the Philippine Islands’ Emilio Neri Jr.— shared the highest forecast of 2.5 percent year-on-year.

Neri attributed his forecast to “higher LPG, Meralco power rates, and pork and vegetable prices” as well as a low year-ago base.

Ang also pointed to elevated pork prices and school-related expenses as blended learning in public schools started last month.

Five economists projected a 2.4-percent inflation in October: Banco De Oro Unibank’s Jonathan Ravelas, Barclays’ Angela Hsieh, ING’s Nicholas Antonio Mapa, Rizal Commercial Banking Corp.’s Michael Ricafort and Security Bank’s Robert Dan Roces.

“We expect a rise in food price inflation to offset a deeper decline in retail fuel prices,” Hsieh said.

For his part, Roces said “the impact of weather disturbances also put some price pressures on select food items.”

Nomura’s Euben Paracuelles, Sun Life Financial’s Patrick Ella and UnionBank of the Philippines’ Ruben Carlo Asuncion projected October inflation to match September’s headline rate of 2.3 percent.

Four economists had forecasts below the September inflation rate: ANZ’s Sanjay Mathur and Moody’s Analytics’ Steven Cochrane (2.2 percent); University of Asia and the Pacific’s Victor Abola (2.1 percent) and Capital Economics’ Alex Holmes (2 percent). —Ben O. de Vera